Countries Move to Secure Farmland Worldwide

Bridging the Gap

National governments and major players worldwide are moving to secure strategic geopolitical interests in the food and agriculture industry around the world. This trend has been playing out for decades, and its protagonists are medium and high-income countries whose domestic needs exceed their capacities. For example, China’s population represents 20% of the world’s total, but its productive arable land only represents 8% of the world’s total. In order to bridge the gap and fulfil its domestic needs, the Chinese government as well as its proxy enterprises worldwide have been buying substantial amounts of farmland in emerging regions and markets. Throughout Africa, these Chinese ventures are called “friendship farms” and are directly managed by Chinese farmers living in the respective countries. Furthermore, the produce cultivated is chosen based on the needs and tastes of mainland China, to where these products are directly exported.

Overseas Production: A Global Phenomenon

Even though the Chinese government is the largest owner of overseas farmland, it is not the only one. European and western nations such as the United States, the United Kingdom, and Germany, also operate strategic agricultural projects in order to secure additional food sources for their citizens. International farmland operations led by foreign governments are mostly concentrated in Latin America and sub-Saharan Africa. The main countries where such farm operations are established include Ethiopia, the Philippines, and Brazil. Nevertheless, the food and agriculture industry is not limited to a north-south dynamic. In recent years, several oil-rich Gulf nations have invested in farmland in both Europe and the United States. For example, Saudi Arabia owns and operates irrigation-intensive farmlands along the West Coast of the US. The crops cultivated by Gulf nations in the United States would be almost impossible to reproduce in the Middle East because of water scarcity in the region. Therefore, crops such as Alfalfa are grown overseas and then imported into the respective countries.

The actions and initiatives of nation-states around the world in order to secure food and agriculture interests attest to the demographic and economic trends of the 21st century. Such trends include the dramatic increase in worldwide population, the greater need for productive farmlands, and the progressive growth of the agricultural commodities market. In spite of governmental efforts to secure the stability of food and agriculture supply in the future, it is not certain that these efforts will be enough. Therefore, private companies and individual investors should play a major role in developing farmland as well as agricultural technology in order to participate in the growing food market worldwide. These dynamics represent opportunities in the real estate and agriculture sectors as well as the research and technology sectors. For individual governments the issue of food and agriculture is one of national security and regional stability. However, for investors it represents a great opportunity for growth, diversification, and reward.